tv [untitled] February 3, 2012 7:00pm-7:30pm EST
and every weekend american history tv. 48 hours of people and events telling the american story. get our schedules and see past programs at our web sites and join in the conversation on the social media sites. the u.s. postal service says may 15th is the deadline for congress to approve a plan to save the post office as we know it. if congress doesn't do it, postal officials say they will implement a plan to slow down first class mail, close some 250 mail processing plants nationwide and eliminate 28,000 jobs. tonight, a look at the proposed overhaul of the u.s. postal service. we will show you a congressional hearing on the plans. the post master general will outline the hearing. we begin with the capitol hill reporter's conversation. >> rachel covers postal service issues for the post master.
the post office could run out of money by next fall. why is the post office in such serious financial shape? >> the 200-year-old postal service is going bankrupt because of the internet age in part. it has too many mail men and not enough mail to carry. the most obvious thing is the internet. people are paying their bills online. because of this, the volume of first class mail has dropped 20% in the past five years. with that drop comes a drop in postal service revenues. last year, the postal service lost $5 billion. it would have lost $10 billion if congress did not extend the deadline for bills it owed the u.s. treasury. that comes on the losses from 2010 as well. $8.5 billion.
donohue said it will increase. >> senator susan collins has called the usps financial situation "dire." what legislative solution is that committee working on? >> that committee has a bipartisan bill. it came out of committee in november. it is expected on the senate floor in the next few weeks. before presidents day or after presidents day. what that bill would do is allow the postal service to recoup a refund from the retirement account to use about $10 billion and take that money and do 100,000 buyouts. basically they would use that money for about $25,000 buyouts. mostly through attrition.
there will be a lot of folks retiring. they will phase out door-to-door delivery. allowing the post office to ship beer and wine and allowing you to buy fishing licenses at the post office. >> is the post master general in agreement with the senate bill? >> the post master general has said he agrees with parts of the senate bill. ideally, he just wants as much flexibility as he can get. since the postal service is partially a governmental agency, it needs permission from congress to do a lot of things. he supports the buyouts partially. he would like to move from six-day delivery to five-day delivery. eliminating saturday delivery. the senate does not include that provision.
they would have to show they implemented several other cost-saving measures before they would allow to move to five-day delivery. >> you have a bill by senator john mccain. how do these measure? >> john mccain offered a bill that is the companion version of republican isef's bill from california in the house. that bill would create a politically appointed five-person commission that would be approving millions of dollars worth of closures. basically what that does is it takes the power from the postal service management and that commission would be the one to approve the closures. >> congress is facing a may 15th deadline when the current moratorium on post office closings will be lifted. any indication they are on a path to get the bill passed? >> they have been chatting on it quite a bit.
they have put it off since this fall. lawmakers hope to take this up in august and then september and then christmas. now it is around, you know, the presidents day weekend. i think that the senate bill will be moving in the next few weeks. reid has said he is making it a top priority for the first part of the session of the 112th congress. probably coming up in a few weeks. i think they will meet that may deadline. >> an update from rachael bade. you can read more at cq.com. thank you for joining us. >> thank you so much. the senate governmental affairs committee took up a proposal in november to avoid bankruptcy by tapping into the payments to reduce staff. the senate bill would keep a six-day mail schedule for another two years. a similar bill was approved by the house oversight and reform
committee. this hearing is about three hours. good morning and welcome to this markup. we don't have six required for a formal quorum to begin processing amendments and the like, but i thought perhaps we would be able to expedite the proceeding if we began with some opening statements on the main, though not only item on our agenda today, which is s-17889, the 21 century postal service act of 2011. i have a statement i'm going to include in the record without objection. i just thought i'd speak for a few moments. it's been a real honor for me since i came to the senate in 1989 to serve on this committee first in its earlier iteration as the governmental affairs
committee and now for the last several years as the homeland security and governmental affairs committee. i would say that some of the most productive work that i've had the privilege to do has happened in this committee. because i think of a couple of things. one, it has a very strong and real and i'd say proud tradition of bipartisanship. the second is that the committee has not shrunk from confronting real problems and presenting to our colleagues in the full senate solutions that are bipartisan. and that, therefore, more often than not have gone on to be adopted by both houses. notable among the list as i look back just in the last decade after 9/11 this committee -- the
attacks against america on 9/11, this committee initiated the legislation that led to the creation of the department of homeland security. we also raised the bill that was adopted that created the 9/11 commission, which did, as we all know, an extraordinary independent, nonpartisan investigation of that attack on us on 9/11/01 and presented comprehensive reform legislation to make sure as much as we could that nothing like that would ever happen again. and then this committee adopted that legislation in two iterations over the next three or four years which constituted together, i believe, the most significant reforms in our national security security, homeland security apparatus since the end of the second world war. and did a lot of other bills.
we have a bill on cyber security that's now working its way through, confronting another big challenge. and i'm particularly thrilled to work with senator collins as closely and productively as we have. today this committee confronts another big problem facing our country and i'm very proud that we are, four of us, the ranking member, the chair of the -- the subcommittee that oversees the postal committee and senator brown are presenting a bipartisan solution, we believe, to the crisis that the postal service is facing today. in some sense i was thinking this morning this is a -- it's not small. it's not a small problem. but it is a kind of mini version
of the macro problem that we're wrestling with now, which is regarding our entire federal government. and the increasing debt that we're accumulating that will shackle and diminish our future as a country unless we deal with it. and of course that's being played out now in the so-called super committee. but the postal service is a -- really an extraordinary american institution, begun really at the beginning of the country in the 18th century. and yet it's not a relic. it is a great national asset and it -- there's well over a trillion dollars of our national economy that's dependent on the u.s. postal service. but the sad reality is that it's -- it's gone into what i fear will be a death spiral unless we do something together
to rescue it. this year the budget of the u.s. postal service will be $65 billion approximately. its expected losses this year are going to be about $10 billion. it's just not going to be able to continue operating in that way and be the postal service that this country has depended on, including the promise of universal service. $10 billion deficit. now why has this happened? there are a lot of reasons. a lot of them may be internal about the management of the organization and postmaster himself has asked for authority to make the operation more efficient. i think we've given him a lot of that today. but the world has changed.
particularly with the advent of the internet, the volume of mail that the post office is asked to carry and deliver has diminished greatly. and obviously in recent years, the post office like every other economic entity has been affected by the economic recession that we've been in and in some sense are still fighting our way out of. so the status quo is not going to work. and, therefore, senator collins, senator carper, senator brown and i work together very hard across party lines without regard to party lines to see if we can come up to a solution to this problem that will change the postal service so that it could survive the 21st century and go on in a healthy way to the 22nd century.
i think we've got a substantial proposal to make to you today that authorizes changes in the postal service that really will cut costs by reducing the work force by reforming some of the benefit plans of the employees of the postal service and by consolidating the services that the post office offers the american people and the american businesses. we explicitly do not do what so many people are asking us to do, which is to allow the increase in the price that the postal service charges. so-called exigent increase. some ask we legislatively override the post office's request for an increase of that kind. basically our judgment was that if you -- the last thing that
you want to do with a business when it's in trouble is to raise prices because you'll -- you'll end up having less business than you had before. so we think that this proposal we've made will enable the postal service to save billions of dollars by one estimate, a credible estimate that i've seen without any change. if the postal service just goes along on the status quo, by the year 2020, it will be spending $85 billion a year. if this bill is enacted and the powers we give the postmaster to work cooperatively with his employees and others are enacted, this estimate says that the postal service will be spending $65 billion a year, which obviously is a $20 billion saving and i think enough to allow it to go on into the future. i know that there are parts of our proposal that are controversial. frankly from both perspectives. some people think parts of it
are too tough, some people think it's not tough enough. we think, the four of us, that we're presenting to our colleagues on this committee a bipartisan solution to a big national problem that can pass both houses of congress and be signed by the president. of course to say the obvious, that's not perfect. there are a lot of amendments that can be filed with the committee that -- some of which can help to make it better, some of which we hope will not so we'll oppose them. we look forward to a good debate. i'd like to finish our consideration of the bill today. our staffs have asked your staffs to see if we could have the option of reconvening at 2:30 this afternoon if we can't finish this morning. we'll follow a process that i think worked well with the
department of homeland security bill, we'll go back and forth with amendments in the order of seniority until we are finish. with that, it's my honor to call on senator collins. >> thank you, mr. chairman. let me begin by thanking all of our members. every single member at this committee has expressed an interest in the postal service's financial crisis. many of you have put together suggestions, have offered amendments and i think it's a tribute to this committee that all of our members have been so engaged on this very important issue. but i do particularly want to salute the leadership of senator lieberman, senator carper and senator brown, who have worked very hard. the four of us have spent
countless hours in coming up with a bipartisan agreement that will put the postal service back on a sound financial footing. this bipartisan bill gives the postal service the authority it needs to restructure, modernize and thrive. i want to point out an unassailable fact. that the postal service literally will not survive without fundamental administrative reforms. the postmaster general has been very clear on this. he has told us that a year from now the postal service will be unable to meet its payroll. those dedicated postal workers will not be able to be paid and
that means that the mail will not be delivered. in fiscal year 2010, the postal service losses were $8.5 billion. in fiscal year 2009, they were $3.8 billion. in fiscal year 2008, they were $2.8 billion. as you can see, we're going in the wrong direction and if nothing changes, the projected losses for this fiscal year are $10 billion. again, that means that this crisis would result in the postal service being unable to meet its payroll. jobs are at stake. i think many people when they think of the postal service think of their local post office. they have great affection toward their local post office.
if their a business, they may be aware of the postal processing facilities. the fact is, the postal service is the lynchpin of a $1.1 trillion mailing and mail-related industry that employs approximately 8.7 million americans in fields as diverse as direct mail and printing and catalog companies and the list goes on and on. in our bill, we are asking -- no, we are directing the postal service to make painful choices to reduce its costs and not simply slash services and raise prices which would only add to its death spiral. the solution to the postal services financial crisis is not easy, but it must involve
tackling significant expenses in ways that do not drive away customers and further depress its volume. the postal service's mission is to provide the american public with affordable universal service, but as operating costs have increased and volume and revenue have plummeted, we need to allow the postal service more flexibility and give it more tools to remain solvent. no one, least of all the four sponsors of this bill, none of us is happy with every provision in this bill. it's a compromise and that is the nature of a compromise. but nevertheless, it does not avoid the difficult issues. it tackles the very tough issues
in a responsible way. let me just comment on some of those issues. 80% of the postal service's costs are work force related. that means that painful though it is, you cannot solve the postal service's problems without giving the tools that are necessary to confront some of the work force problems and those are difficult ones because all of us have the deepest of respect for our postal employees. but the fact is that the work force is too large for the volume that remains. our plan gives the postal service -- gives the postmaster general the authority to offer the compassionate early retirement incentive to
encourage tens of thousands of eligible employees to retire. the postmaster general's estimate is that 100,000 workers would take advantage of this program. it would be financed, in part, by the $7 billion overpayment made by the postal service to one of the federal retirement programs. this is a refund that everyone who has looked at this issue agrees is warranted. we had gao did the final call on this and gao has substantiated that there is, in fact, an overpayment to the pers program. we have not included a provision in the earlier draft to refund $55 billion from the srrs
retirement program because gao determined that was not, in fact, an overpayment. there are lots of disagreement on that, but we dropped that. we are only refunding the $7 billion overpayment that all parties from independent actuaries and gao and inspector general have verified as being a true overpayment. this buyout program will help to right size the work force, which again, is driving 80% of the postal service's cost. the bill also includes long overdue reforms to the federal workers compensation programs. these reforms, too, will save hundreds of millions of dollars and help put more individuals back on the path to work.
unfortunately, the current program has become an alternative retirement program for too many workers. the postal service which is responsible for some 60% of the claims in the federal employees compensation program now has 2,000 employees age 70 and older receiving worker's comp. two of them are now aged 99. those individuals are never coming back to work. and it does not make sense for them to be on a compensation program which is intended for workers who are injured and returning to work. that is why the obama administration has proposed
sweeping changes in the worker's comp program. our bill reflects the changes advocated by the obama administration, by the gao, in numerous reports by the ig of the department of labor which administers the program. on other issues, we have included a two-year prohibition on moving to five-day delivery. our belief that it is important for the postal service to squeeze out all of the costs in the system before doing this dramatic reduction from six days to five-day delivery. that reduction could come about only if gao certifies that the savings have bee made and the
prs also ratifies that savings and it is still not adequate to return the postal service to solvency. i think this is so important. one company has told me that 18% of our seniors receive their prescription drugs through the mail on saturdays. there are newspapers that rely on saturday delivery. if we lose those businesses, they will turn to alternative forms of delivery causing a further decline in the postal service's volume. but again, we're taking a realistic view. we're saying that if the cost reductions included bill are not sufficient, then the postal service would reduce the number of days of delivery. but this should be a last
resort, not the first option. on another controversial issue, as i'm sure all of you have heard from constituents who are very upset about the closure of small post offices in their communities. we'll have more discussion on that later. i know a number of members have been working very hard on an amendment in that area so i will wait to talk more about that later. there are many other provisions in this bill. it is a comprehensive approach. i believe it will accomplish the goal of putting the postal service back on a sound financial footing. again, the changes are going to be painful. the decisions are difficult ones and i thank my colleagues for working so hard to bring us to this point. >> thank you, senator collins.
before i call on senator carper and senator brown with the committee's permission. the rest of the agenda is non controversial. i would like to consider the following items. if no member objects, report them to senate. the five nominations on the agenda. one legislative item. a resolution commemorating. if there is no objection, the committee will consider the items. please a aye. the ayes have it. the motion carries and the nominations are reported. yes? >> may i -- >> without objection, the senator's remarks will be included in the record. senator carper and collins have been leaders in the postal
service over the years. you have done great work earlier. which has basically helped to keep the postal service ambulatory if i can put it this way. the business environment has changed. it is postal reform, but postal rescue legislation. with thanks to senator carper and senator collins. i'll call on senator carper who kins continues to be the co- chair. >> thank you. thank you for the leadership you provided and for the encouraging the way the rest of us used to work. the democrats and republicans set aside differences and we try to fix things. the results are what the american people are looking for right now. they want to make sure we can still govern.